MIAMI – For the first time since 1957, Florida has become the fastest-growing state in the United States. But while residents are moving in, insurers are rushing out.
Property insurance rates in Florida are predicted to jump at least 40 percent this year, according to the Insurance Information Institute.
Aris Papadopoulos of the Florida International University Extreme Events Institute explains what’s fueling this costly crisis and what homeowners can do about it.
“The property market is collapsing because the property insurers are losing money big time and there’s several reasons they’re losing money big time. The assets they’re insuring are not as strong as they thought, inflation is coming in, litigation has been a problem for the last three or four years, it’s risen,” said Papadopoulos.
Papadopoulos said in order to secure or keep insurance coverage, people need to prioritize the resiliency of their homes, rather than the appearance.
“Unfortunately what we’ve been marketed for many decades and (for) several generations is cosmetics, the look of the kitchen, the bathroom, the tiles, the granite countertops. We’ve not been educated in how important the roof is, the walls, the windows, the doors, and those are the things that are going to protect us as a family and us as an investment,” he said.
To appreciate the importance of making sure your home meets upgraded building codes, Papadopoulos shared a video showing the difference between a structure built before Hurricane Andrew, and the other one, after.
But it isn’t only protecting yourself against wind damage that should be a consideration. He said reducing the potential for damage from rising water could also improve your insurance prospects.
Papadopoulos suggests:
- Moving electrical outlets higher from the floor.
- Choose waterproof flooring.
- Look for a professional that can apply a coating to the exterior of your home to help block water intrusion through the walls.
“Because once water penetrates the walls either from the outside or the inside, here in Florida, you’ll have mold and once something starts molding it can’t be repaired it has to be torn out, it has to be replaced,” he said.
Papadopoulos believes that easing the insurance crisis ultimately comes down to personal responsibility.
“Insurance is not a maintenance fund,” he said.
That means individual property owners need to take it upon themselves to harden their homes to the strongest standards.
“If we can encourage that then as a whole we can solve the problem because without that we’re never going to solve the problem,” he said.
Because it can take several months, even longer, for an insurance company to review and pay claims, he advises that along with money to meet all your deductibles, it’s essential to make sure you have a financial plan to cover other obligations and needs in the meantime.
For more tips, go to www.buildingresilient.com.